Farm Debt Mediation

The Farm Debt Mediation scheme in Victoria makes it compulsory for banks and other creditors to offer mediation to farmers before commencing debt recovery proceedings on farm mortgages.

The Rural Financial Counselling Service provides a critical role for farmers going through Farm Debt Mediation.

This occurs in three main ways:

1. Pre Farm Debt Mediation Preparation

A Rural Financial Counsellor is able to assist farmers in preparing for the mediation by helping the farmer accurately understand their current financial and personal situation, and assist the farmer to develop plans to improve that situation. These plans often form the basis for the proposal the farmers may put to the financial institution at the mediation. Through experience in previous Farm Debt Mediations, the Rural Financial Counsellor can help the farmer understand the process and format of the mediation. In some circumstances the farmer (and their family) can spend a considerable amount of time with the Rural Financial Counsellor preparing for the mediation.

2. Farm Debt Mediation Day

The Rural Financial Counsellor provides support to the farmer and their family on the day of mediation. Mediations typically last between four and six hours and are can be a very stressful event. Often major decisions need to be made on the day and having an independent person who is very familiar with your situation can be very comforting and reassuring for the farming family. While the Rural Financial Counsellor is a great support on the day it is important to remember that they cannot act for the farmer or give advice.

3. Post Farm Debt Mediation Support

Usually an agreement is reached between the farmer and the financial institution at the conclusion of the Farm Debt Mediation. This agreement often has some actions or steps that the farmer needs to undertake. The Rural Financial Counsellor continues to support the farmer following the mediation to assist them to meet these requirements. This might involve the development of a formal action plan.